Chilean Peso Touches Two-Week High on Eased Demand for Refuge

Chile’s peso reached a two-week high as a reopening of banks in Cyprus buoyed the global economic outlook and eased demand for a refuge in the dollar.

The peso appreciated 0.1 percent to 472.25 per U.S. dollar at 10:39 a.m. in Santiago after touching 471.50, its strongest intraday level since March 15. The currency extended its quarterly rally to 1.5 percent.

“The reopening of banks hasn’t been chaotic in Cyprus, and that is causing people who sought refuge in the dollar to reduce their positions,” Alexis Osses, an analyst at XDirect Chile Ltda., said in a phone interview.

Volatility in the Chilean peso is at the lowest level in 15 years as it trades in a narrowing range. Speculation that the central bank will intervene to weaken the currency has prevented it from appreciating while faster-than-forecast economic growth and stable interest rates warded off declines.

The euro rose 0.3 percent to $1.2819 today as banks in Cyprus reopened with a 300-euro daily limit for cash withdrawals after being closed since March 16. The price of copper, Chile’s main export, fell 0.2 percent in New York.

To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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